May 23, 2024
PALO ALTO – Whenever I visit Stanford University, with its gorgeous architecture and temperate climate, I tend to succumb to a surreal combination of healthy skepticism and cautious optimism. On one hand, I never bought into the whole techno-optimist hype of “Big Tech” companies in the surrounding Silicon Valley. From laying out underwater fiber optic cables to launching satellites into space and dumping billions on speculative metaverses and cyborgs, the market hegemony of Tech Titans evokes a neo-medieval era of aristocratic self-indulgence with a vengeance.
The unjustifiable meta-wealth and puerile rants of Elon Musks of this world are a mockery of our most fundamental ideals as modern citizens. Tech Titans’ self-serving libertarian policy advocacies and Nietzschean nihilism constitute a clear threat to democracy, which is anchored in egalitarianism and robust state institutions. Nevertheless, I always welcomed visionary leadership based on realistic recognition of potential and positive trends. My latest talk at Stanford concerned the future of the Southeast Asian region. Joined by Indonesia’s former trade minister Gita Wirjawan as well as Professor Don Emmerson of Stanford University, I forwarded a vision of a region filled with increasingly assertive and self-assured middle powers. From Indonesia to Vietnam and Thailand, the region is set to feature multiple trillion-dollar economies with relatively robust militaries—and a greater sense of themselves and their place in the world. Far from a rose-tinted worldview, however, I acknowledged increasing political polarization at home, growing economic inequality, and the disruptive power of climate change and artificial intelligence, which could upend some Southeast Asian societies in coming decades.
It’s my contention, however, that, against all odds, the Philippines is Asia’s unsung success story. Despite our broken politics and kakistocracy, the country has managed to become one of the fastest-growing economies on earth. In fact, the Philippines is expected to go toe-to-toe with Vietnam and India in terms of annual GDP rate in the coming years. Thanks to our more favorable demographic trends, and healthy rates of remittances from overseas, the Philippines will likely outgrow Vietnam, which has a similar per capita income to us. As The Economist magazine recently put it, “Without fanfare, the Philippines is getting richer” (4/23/24).
Global interest in the Philippines is growing. Over the past year alone, I have met with at least three senior journalists from The Economist magazine, including a deputy editor, who picked my mind on the country’s overall political economy and long-term prospects. I think the dynamic and visionary Sabin Aboitiz was up to something when he argued, before global investors, that the Philippines is “the next big thing in Asia.”
It goes without saying that we should up our game. Unlike Vietnam, which has successfully lifted tens of millions out of poverty, the Philippines is yet to build a robust manufacturing sector, which is sine qua non for inclusive and sustained development. And unlike India, which is set to become the third largest economy on earth, we don’t have a particularly large domestic market to leverage on the global stage.
As I have repeatedly argued in these pages, the Philippines desperately needs, not only good governance, but also a proactive industrial and trade policy. As Harvard economist Dani Rodrik has correctly argued, an effective 21st-century industrial policy will have to combine specificity (i.e., targeting particular sectors), social partnership (i.e., based on public-private collaboration), and systemic scrutiny (i.e., subsidize and support only successful firms and sectors). For instance, we need a more modest version of America’s CHIPS and Science Act to develop our semiconductor industry.
Just as crucial, however, is developing a proper narrative of national success. As my co-panelist in my latest Stanford engagement, Gita Wirjawan, rightly emphasized: We also need “good story-tellers” in our region to inspire economic dynamism and good governance.
At once, we should reject both politically motivated naysayers as well as toxic-positivity propagandists. Instead, we need thought leaders, who transcend poverty porn narratives about the Philippines in favor of those that celebrate our large aspirational middle class, world-class professionals, and young and dynamic entrepreneurs, who are collectively catapulting our country into a new era of prosperity and self-confidence. Time to dispense with self-defeating mindsets and performative populism—and make the most out of our new moment in the sun.